WeightWatchers 2005 Annual Report Download - page 106

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
As of January 1, 2005, other accrued liabilities included $1,519, consisting of food royalties
received on behalf of Heinz.
12. Employee Benefit Plans
The Company sponsors the Weight Watchers Savings Plan (the ‘‘Savings Plan’’) for salaried and
hourly employees of WWI. The Savings Plan is a defined contribution plan that provides for employer
matching contributions up to 100% of the first 3% of an employee’s eligible compensation. The Savings
Plan also permits employees to contribute between 1% and 13% of eligible compensation on a pre-tax
basis. Expense related to these contributions for the fiscal years ended December 31, 2005, January 1,
2005 and January 3, 2004 was $1,529, $1,361 and $1,228, respectively.
The Company sponsors the Weight Watchers Profit Sharing Plan (the ‘‘Profit Sharing Plan’’) for all
full-time salaried employees of WWI who are eligible to participate in the Savings Plan (except for
certain senior management personnel). The Profit Sharing Plan provides for a guaranteed monthly
employer contribution on behalf of each participant based on the participant’s age and a percentage of
the participant’s eligible compensation. The Profit Sharing Plan has a supplemental employer
contribution component, based on WWI’s achievement of certain annual performance targets, which
are determined annually by the Board of Directors. The Company also reserves the right to make
additional discretionary contributions to the Profit Sharing Plan. Expense related to these contributions
for the fiscal years ended December 31, 2005, January 1, 2005 and January 3, 2004 was $1,975, $1,808
and $1,655, respectively.
For certain senior management personnel of WWI, the Company sponsors the Weight Watchers
Executive Profit Sharing Plan. Under the Internal Revenue Service (‘‘IRS’’) definition, this plan is
considered a Nonqualified Deferred Compensation Plan. There is a promise of payment by the
Company made on the employees’ behalf instead of an individual account with a cash balance. The
account is valued at the end of each fiscal month, based on an annualized interest rate of prime plus
2%, with an annualized cap of 15%. Expense related to this commitment for the fiscal years ended
December 31, 2005, January 1, 2005 and January 3, 2004 was $1,050, $947 and $774, respectively.
During fiscal 2002, the Company received a favorable determination letter from the IRS that
qualifies WWI’s Savings Plan under Section 401(a) of the IRS Code.
The Company also sponsors the WeightWatchers.com Savings Plan for salaried and hourly
employees of WeightWatchers.com. This plan is a defined contribution plan that permits employees to
contribute between 1% and 13% of eligible compensation on a pre-tax basis. There are no employer
matching contributions and therefore no expense is recognized for this plan in the consolidated
financial statements.
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